Study: Financial fears not enough to change behavior
Many, particularly the young, are reluctant to change, despite recession
By Cara Henis
Nothing frightens a homeowner into assessing their financial situation like an unhealthy job market and the fear of impending unemployment, according to an August 2009 survey commissioned by Wells Fargo & Co. and conducted by Ipsos Marketing, a marketing research company.
Yet fear may not be enough to encourage actual change. Despite the stormy economic conditions, more than a third of homeowners haven't made significant changes to their financial habits.
"Homeowners are worried about their jobs, and debt is still historically high, however, many people may not be making the necessary changes to improve their finances," Jamie Moldafsky, of Wells Fargo Home Equity Group, said in a press release.
Young homeowners, ages 18 to 41, appear less likely to modify their financial situation than homeowners ages 42 and older. Of those who haven't altered their spending habits, 60 percent of young homeowners cite an obstacle preventing them from doing so, as opposed to the 27 percent of older homeowners who felt incapable of making changes.
Why no change?
Obstacles sited by young homeowners ranged from not knowing what to do (10 percent) or not wanting to change (2 percent) to failure to implement plans to improve financial behavior (22 percent.) The most prevalent bump, cited by 24 percent of the 1,600 homeowners interviewed, was the feeling that modifying behavior wouldn't drastically improve their financial situation.
The young homeowners also appear to be at a loss regarding their credit. Thirty-five percent of homeowners from 18 to 29 have not gathered information on improving their credit -- though they mention a need to do so -- compared to only 11 percent of homeowners from ages 42 to 60.
Yet as unemployment rates increase -- hitting 9.4 percent in July, according to the U.S. Bureau of Labor Statistics -- and confidence decreases, most homeowners of all ages are adopting a more miserly attitude. Homeowners are spending less than they were a year ago, with around 50 percent cutting entertainment and vacation expenditures. A majority of Americans now compare prices when shopping and 37 percent report buying only what they need.
Others say that the recession has improved their budgeting skills and incited them to pay off past debt.
The silver lining of this economy seems to be the changes to more financial healthy behavior," said Moldafsky.
See related: Poll: Americans losing sleep over finances
Published: August 13, 2009
- Poll: You can get better credit card terms just by asking – If you want better credit card terms, the best thing to do is call your card company and ask, a new CreditCards.com survey shows ...
- Applications dip, credit market shows signs of cooling off – The market for consumer loans, including credit cards, pulled back in a February survey of consumers ...
- Online and mobile banking statistics – Bank branches aren't a thing of the past yet, but that could be the way they're headed now that consumers can deposit checks, check balances and even open accounts via computer or smartphone ...